In the era of music streaming, AI has not only changed the way music is created but also become a tool for new forms of crime. Recently, 52-year-old Michael Smith from North Carolina formally pleaded guilty in the U.S. District Court for the Southern District of New York. He was charged with using AI to generate thousands of songs and collaborating with "robot armies" to manipulate charts, defrauding over $10 million (approximately RMB 72.5 million) in royalties over the past seven years.

Smith's method of committing the crime was highly representative: he first used AI tools to mass-produce thousands of shallow melodies every day, then uploaded them to mainstream platforms such as Spotify, Apple Music, and Amazon Music. To avoid triggering the platform's anti-fraud systems, he did not concentrate traffic on a few songs but instead used thousands of automatically running robot accounts to spread the clicks across hundreds of thousands of AI-generated songs.

According to prosecutors, Smith could generate about 660,000 plays per day through this method, with annual royalty income stabilizing around $1.2 million. As social media comments put it: "He used AI to create music, then used AI to create listeners, ultimately taking real money from the pockets of real artists."

This case has caused a stir throughout the music industry. Because streaming platforms usually adopt a "proportional distribution" model for royalties, where revenue is distributed based on play counts from a total fund pool. Every dollar Smith stole was essentially taken from independent musicians and copyright holders who had real audiences.

This is the first successful prosecution in the U.S. targeting AI-assisted streaming fraud. Currently, Smith faces multiple charges, including conspiracy to commit wire fraud, and could face up to five years in prison, as well as being required to forfeit more than $8 million in illegal gains.

As AI music generation tools like Suno become more widespread, the number of AI tracks received by streaming platforms daily has reached tens of thousands. This case serves not only as a warning to opportunists but also forces the industry to rethink: when "non-existent songs" are consumed by "non-existent people," how should the foundation of digital music value be restructured?